No GST on traditional Rakhi; 5% tax on gold, silver rakhis

Rakhi, the sacred thread that women tie on the wrist of their brothers on the day of Raksha Bandhan, will not attract the goods and services tax (GST) provided it's the traditional cotton thread. However, gold and silver rakhis will be taxed 5%.

The finance ministry has said puja samagri, including holy red thread 'kalava', would attract nil GST. Thus, rakhi, which is in the form of kalava, would be exempted.

Any other rakhi would be classified as per its constituent materials and attract GST accordingly, it said. Thus, rakhis made of gold and silver would face 5% GST.

Central Board of Excise and Customs made these clarifications in response to queries from industry and public in the form of frequently asked questions. It also clarified that sandesh, a popular Bengali sweet, would attract 5% GST whether it contains chocolate or not, clearing a confusion over tax treatment of sweets that contain other substances. The industry had sought clarification on tax rate on sweets containing chocolate, which attracts 28% GST.#casansaar (Source - Economic Times)